One of the things that gave the market such confidence in Alan Greenspan was the depth of his opacity. The pieces of data and considerations that affect the price level, asset markets and the economy are not all that difficult to speak to in clear layman's language. But that was not Greenspan's style. Greenspan mostly spoke without saying anything, employing a variety of ambiguous and highly technical jargon when discussing or justifying policy. And, rational as they are, investors mostly mistook that for a rarified intelligence, and his policy moves as virtuosity. This created the impression that Greenspan was this monetary deity, a 'maestro', orchestrating the economy from up on high, which proved exceptionally calming to investors who operate in an uncertain world with potentially very expensive consequences. The bulls had their man in charge of the controls, and even the most factually compelling and exceptionally worrying bear case could be swept aside by a flick of the maestro's wand.

Of course, it was all a mirage. Those without bull market stars in their eyes- a vast minority if you took in earnings multiples then and real estate prices since- knew that something was rotten in Denmark. And most of them knew that Greenspan was well aware of the extent of bad credit that was being created, and the concomitant asset bubbles- that he simply couldn't stomach the consequences of addressing it. That his ego wanted very dearly to believe what his mind would not sign off on.

Enter Ben Bernanke, the fruition of Greenspan, the guy who lapped up the Kool-Aid and asked for seconds. Fittingly, he now sits atop the massive inverted pyramid credit nightmare he helped to create. As these things tend to work out, Mr. Bernanke is also the weak-kneed heir to the throne who's just not up for it. In testimony on capitol hill, he's been bullied and sat there with his tail between his legs. In just the past few months he's been cowed into huge changes in policy- slashing the Fed Funds rate in both instances. Jim Cramer, and now Larry Kudlow- two of the most discredited analysts in investment history- can now claim to have influence on our nation's central bank. Added to this shameful record, Mr. Bernanke has done away with Greenspan's lack-of-transparency, to his detriment. To date his Pollyanna public forecasts, (sub-prime was successfully 'contained', the economy was strong...), have proved to be woefully off base. And just now the FOMC has taken to being dishonest- in today's statement they don't even mention the stock market, notwithstanding how patently obvious is the catalyst for their extreme and unprecedented action, (the fed has never cut by 75bps, and never this close to scheduled meeting). What a joke!

So, an underreported story on the back of all this is that Chairman Bernanke is quickly losing any semblance of respect or credibility from investors, and that will cost him and us very dearly if as I suspect this thing gets much more serious. Remember the US dollar is a Fed liability...

see: http://blogs.abcnews.com/politicalpunch/2008/01/obama-v-clinton.html#comments

The electability gap between democrats is huge. Clinton, with her high negatives is a big target, and this bruising primary campaign has underscored the worst about her. This is to say nothing of what will happen if indeed the Republicans nominate McCain, given his ability to tar her as a flip flopper who doesn't pass the commander-in-chief test because of how she's been all over the place on the Iraq War, (and, to a lesser extent, given her public prognostication about the surge that she's since backed off of), which makes her look indecisive and irresponsible. Also, she won't be able to hit him on war mongering toward Iran because... she voted for that.

Now, if by some miracle we were to nominate Obama, that's an entirely different story:

http://article.nationalreview.com/?q=YjU2ZjQ3MGNiZjNmZjYxOGQ3M2Y4NmY2NDVhMDk0Mjg=

Keep in mind, this is not Kos pontificating. This is one of the most staunchly conservative rags going.